Noah Zatzkin: Hi. Thanks for taking my question. Most of my questions have been asked and answered. Maybe just one on HDFS, how are you feeling about the health of the book? And then in terms of the annualized retail credit losses during the quarter, any reason to believe retail credit losses wouldn’t kind of track with kind of normal seasonality from here? And then just anything to consider in terms of the allowance with those losses tracking over there?
Jonathan Root: Okay. Thank you. As we take a look at the HDFS business, we certainly recognize the uniqueness of that, the seasonality within our financial services business is certainly a little bit unique as you look across financial services. Overall, we actually feel like it’s following the curve that we expected that it would from a loss perspective. As we think a little bit about the – trying to answer your specific question on what are we thinking by quarter. We do think it’s going to look pretty normal from a seasonality perspective. So, as you would expect, Q1 being the highest quarter and then you start to see it come down in Q2, Q3 and then pop back up in Q4. So, that sort of normal curve is something that we would expect that we will end up seeing throughout the year.
As you move that across to what does that mean from an overall loss provision perspective, certainly something for us to watch pretty carefully in terms of a number of dynamics. So, as we look at that portfolio, we factor in a whole bunch of characteristics, right. As we think about customer delinquency, the percentage of those customers who end up moving through the loss and some other statistics that surround that. But overall, we feel like that is tracking in the way that we would expect it to. So, first quarter looks a little bit more – a little bit higher as you move into Q2, Q3, you see sort of normalization that follows that period. And then as you flow out of the year, we expect that we are well reserved from an overall loss provision perspective.
So, we feel confident with that. And that sort of helps us inform and hold the guidance that we have provided previously for HDFS.
Noah Zatzkin: Thank you.
Operator: Our next question comes from Megan Alexander from Morgan Stanley. Please go ahead. Your line is open.
Megan Alexander: Hi. Good morning. Thanks very much. Similarly, most of my questions have been answered, so maybe just a bit of a housekeeping one. I know you don’t guide EPS. You did have some nice favorability below the line versus at least what I think Street was expecting. So, can you help us at all with just kind of how to think about some of those lines, tax rate, interest income going forward. Is 1Q the right run rate for a lot of those, or was there some timing benefit with any of those? Any help you can give us would be great.
Jonathan Root: Okay. I can start. And Megan, welcome. So, I think we are pleased to have you beginning to cover us. So, welcome to team Harley-Davidson. As we take a look and we think about the below the line items, we certainly had some tax favorability from a Q1 perspective. So, as we think a little bit about what that complexion looked like, a little bit of favorability in Q1, we probably won’t run quite that favorable from a tax rate perspective all year, so a little bit of caution around that. I think you saw that, that was two points to three points below where we were prior year. And then as you look at other items within there, certainly as we think about the assets that we have to support retirement and some of that other sort of thing that ends up in that below the line item.
Higher interest rates and higher for longer could end up being a little bit more favorable than what we originally budgeted, and so we will see how that plays out based upon the course of action that the Fed takes. But those are probably the biggest – kind of the two biggest drivers within that space.
Jochen Zeitz: And Megan, welcome from my side too. And on behalf of Jonathan, I promise that as of next year, we are giving EPS guidance.
Megan Alexander: Thank you very much. Maybe just to put a finer point on that, I guess so maybe net-net, the impact to 1Q was neutral and when tax rate is going to move in one direction going forward. But the pension stuff might be a little bit more favorable than what you thought?
Jonathan Root: Yes. So, we think there could be a little bit of an impact from that standpoint, yes.
Megan Alexander: Okay. Thank you so much.
Jonathan Root: You’re welcome.
Operator: Last question will come from Jaime Katz from Morningstar. Please go ahead. Your line is open.
Jaime Katz: Hey. Good morning. I am hoping you guys can give us a little bit of an update on the change in the operating loss expectation from LiveWire if 1Q was as expected, what is expected to be better over the rest of the year?
Jochen Zeitz: Good morning Jaime. So, with the relocation of the lab from California to Milwaukee, we are going to centralize all of the LiveWire operations in Wisconsin. And this is going to deliver a fair bit of synergies and efficiencies across the business. So, we are anticipating being able to remove about 10% of the headcount and 15% of the costs related to employees, so all of this will essentially support the revised operating loss, which would be improved by $10 million in terms of guidance for the rest of the year.
Jaime Katz: Okay. And then I know the – one of the union contracts was just ratified. Is there any information on what we should expect for increased labor costs or anything like that going through the SG&A line over 2024 and ahead? Thank you.
Jochen Zeitz: Well, the contract is more or less in line with what we have planned and hoped for. And overall, we are really pleased that this passed on the first round, which shows really broad alignment with our union leadership and workforce. It’s a 5-year contract, so nothing out of the extraordinary that we didn’t anticipate. So, we are pleased with the outcome. And with the ratification of our new contract in New York last year and this year now with Wisconsin, with Tomahawk and PDC, we are all set for 5 years. So, we are very pleased with that outcome. And again, that this vote – union vote passed on the first pass, we are very pleased with that. But nothing unexpected I think and that really shows broadly alignment with our union leadership and our workforce, which is great.
Jaime Katz: Thank you.
Operator: We have no further questions. This will conclude today’s conference call. Thank you for your participation. You may now disconnect.
